Defendant then filed a request for attorney fees based on a provision of the
lease that states:

"If either party institutes any suit or action to collect the
amounts due hereunder or to enforce any covenant or agreement
hereof, or to obtain any of the remedies herein provided, the
prevailing party shall be entitled to recover such sums of money as the
court may adjudge reasonable as attorneys' fees in such suit or action,
including any appeals taken by either party in such suit or action."

"[D]efendant prevailed in persuading this Court that the plaintiffs had
no right to bring an action seeking possession of the premises on the
grounds that the lease had expired, and the grounds that the lease had
expired can't have anything to do with enforcing the lease. It's saying
there isn't a lease, and I think I -- it's not crystal clear. I think it is in
somewhat a gray area here, but I think if defendant had been
successful in defending on their defense -- if we had gotten to the
merits of defending under the lease, they would have a right to
attorneys' fees, but plaintiffs didn't bring this action to enforce the
lease or remedies under the lease. They brought it to enforce their
statutory rights -- under statutory proceeding for their common-law
right to possession, and they lost, but not on grounds having to do with
anything with the lease either."

Defendant appeals from the ensuing supplemental judgment denying
attorney fees. Defendant asserts that, contrary to the trial court's reasoning, plaintiffs'
claim was based on the lease. According to defendant, plaintiffs' entitlement to
possession depended on a determination that defendant had breached its obligation to
maintain insurance coverage required by the lease and, thus, had lost its right to renew.
Defendant argues that, because it prevailed in an action to enforce the lease, it was
entitled to an award of attorney fees under the applicable lease provision. Further,
defendant submits that the letter agreements were not independent from the lease but,
rather, were inherently tied to the parties' rights and obligations under the lease.
Therefore, defendant contends, it also was entitled to attorney fees because it enforced the
lease by prevailing on its affirmative defense.

Plaintiffs' response is threefold. First, plaintiffs argue that an FED action is
strictly a statutory proceeding for possession of real property and is not dependent on
contractual rights, including lease provisions relating to the recovery of attorney fees.
Second, plaintiffs contend that--irrespective of the merits of their first argument--the lease
expired because defendant failed effectively to renew it and, thus, plaintiffs' right to
possess the property was absolute and not dependent on the terms of the lease. Third,
plaintiffs assert that, in any event, the letter agreements on which defendant prevailed
were independent of the lease and merely defined the parties' legal relationship during the
pendency of the declaratory judgment action. Because defendant's successful defense
was not grounded in the lease, plaintiffs urge that the attorney fee provision is not
implicated.

In support of their first argument, plaintiffs rely on Class v. Carter, 293 Or
147, 151, 645 P2d 536 (1982). In Class, the court held that, in an FED action, the
defendant cannot assert a counterclaim against the plaintiff unless the counterclaim is
authorized by statute. The court described the FED remedy as "designed to be quick and
summary, to obtain peaceful resolutions of possessory disputes." Id. at 150. However,
the court did not address the issue of whether an FED can serve as a vehicle to enforce
the provisions of a lease. Thus, Class does not support plaintiffs' argument that an FED
action inherently is not an action to enforce an underlying lease between the parties.

Anderson v. Garrison-Reed Enterprises, 66 Or App 872, 676 P2d 350, rev
den 296 Or 829 (1984), disposes of plaintiffs' first and second arguments. In Anderson,
this court considered a landlord's objection to an award of attorney fees to the tenant
made after the latter's successful defense of a commercial FED action. At trial, the
landlord had asserted that the tenant breached the lease in several respects. In response to
the tenant's post-trial request for attorney fees, the landlord argued that an FED action is
strictly statutory in nature and, therefore, its claim for possession was not based on the
parties' lease. As a consequence, the landlord contended, the attorney fee provision
contained in the lease also was not applicable. We disagreed:

"An FED action is an action to determine the right to possession, and the
right to possession of the commercial property at issue was created by the
lease. Moreover, the lease was the basis for the FED proceeding, i.e.,
plaintiff's right to possession was premised on a violation of the terms of the
lease, and the trial court was required to determine whether defendant's
alleged violation of certain provisions of the lease justified its termination.
We conclude that the provisions for attorney fees in the lease agreement
authorized the award of attorney fees in this action." Id. at 877.

Plaintiffs attempt to distinguish Anderson. They note that there the tenant's
breaches allegedly were committed during the lease term whereas, here, they assert, the
"lease has expired and no longer defines the parties' relationship." That argument draws
too fine a line. In this case, plaintiffs' right to possession could not be determined in a
legal vacuum that ignored the parties' rights and obligations under the lease. Because the
FED complaint was based on a minimally informative form, it did not disclose plaintiffs'
theory of entitlement to possession of the property. That theory, however, was revealed
in the introduction to plaintiffs' trial memorandum:

"The 'Lease' between [plaintiffs] and defendant contains an option to renew
for a five-year period, commencing September 1, 2000. However, the
renewal option is conditioned on the requirement that notice be given to
lessors more than 180 days (March 3, 2000) before the expiration of the
original lease term, and that at the time of notification, defendant be in full
compliance with the lease.

"Defendant failed to meet these conditions. [Defendant] notified
plaintiffs of its intent to renew [the] lease, but by March 3, 2000, 180 days
before the termination of the original lease term, defendant was still in
default of the lease. Specifically, defendant had failed to obtain insurance
that met the terms of the lease. Accordingly, since defendant was in breach
of the lease, it was not in a position to renew, and therefore, is in unlawful
possession of [plaintiffs'] property." (Emphasis added.)

Plaintiffs' theory of recovery thus depended on a determination that the
lease expired as originally scheduled, a premise that hinged, in turn, on the merit of
plaintiffs' assertion that defendant could not renew the lease because it had failed to
maintain required insurance coverage. That theory would require the trial court--after
having determined that defendant breached the lease--to "enforce" the lease provision
providing for the originally scheduled expiration date of its term. Moreover, if the lease
term had expired, defendant was obligated under paragraph 15 of the lease to "quit and
deliver up" the premises. Accordingly, the claim for possession also constituted an action
to enforce that obligation. In sum, plaintiffs' claim for possession--although based on the
alleged expiration of the lease term--nonetheless was an action to "enforce" the lease.
Thus, plaintiffs' first and second arguments fail.

The trial court also agreed with plaintiffs' third argument. The court denied
defendant's request for attorney fees on the ground that the defense on which defendant
prevailed was not based on the lease. In reaching that conclusion, the court treated the
letter agreements as a separate contract between the parties. The parties disagree as to
whether the trial court correctly determined that the defense was not based on the lease.
However, that issue is not dispositive. Having prevailed in an action to enforce the lease,
defendant was entitled to recover attorney fees under the governing lease provision. See
Mitchell v. Pacific First Bank, 130 Or App 65, 76, 880 P2d 490 (1994) ("[I]f a contract
provides that the prevailing party is entitled to reasonable attorney fees, and if there is a
prevailing party, the court must award that party reasonable attorney fees.") (emphasis in
original).

That defendant defeated plaintiffs' claim based on what may have been a
"non-lease" defense is beside the point. Where the plaintiff--if successful--would have
been entitled to recover attorney fees based on a contractual right, a successful defendant
is entitled to attorney fees, unless the judgment rescinded or otherwise nullified the
contract. SeeBennett v. Baugh, 329 Or 282, 285-86, 985 P2d 1282 (1999) (explaining
rule and holding that, because the trial court did not rescind the parties' contract, the
defendant was entitled--despite having asserted a counterclaim for rescission--to recover
attorney fees in successfully defending an action to enforce the contract). In this case,
defendant prevailed on a defense that was, at most, independent of the lease. Having
successfully defended an action to enforce the lease, defendant is entitled to an award of
attorney fees.

Reversed and remanded for award of attorney fees to defendant.

1. The attorney fee allegation in the complaint form relies on ORS 90.255, a
provision of the Oregon Residential Landlord-Tenant Act that is not applicable in this
case, thus suggesting that plaintiffs may have used a form that was not specifically
tailored for a commercial FED action.